Wow! Is Mahindra silently making its way into the USA? EDIT: Got EPA go-ahead Pg. 9

Wow! Is Mahindra silently making its way into the USA? EDIT: Got EPA go-ahead Pg. 9

This is a discussion on Wow! Is Mahindra silently making its way into the USA? EDIT: Got EPA go-ahead Pg. 9 within The Indian Car Scene, part of the BHP India category; Originally Posted by amtak
All the markets are tough till the time you hit the right tone. Plus there are ...

All the markets are tough till the time you hit the right tone. Plus there are so many Indians in USA that they would be more than willing to buy the Mahindra Product! Jokes apart, Statistically speaking, Americans prefer everything Indian and Indians, everything American.

We love to travel in big flashy cars when we go to USA, and they want to travel in Puny Bajaj ricks when they come here. And Yes, Indian things are popular world over (Nano, IT, Masalas etc), let Mahindras cash in over the Indian tag. Lastly, we Indians have the never give up attitude. In the examples you have quoted below are all French companies and they love to shut their shops world over. Don't even talk about Peugeot!

1. "till you hit the right tone". I am telling you that the Scorpio is not the right tone. I think hitting the right tone is the right thing to do, they are not going to hit exactly the right tone from the very beginning. But to barge into a market with a product that is so completely off the right tone, that is guaranteed to be the wrong tone is stupid. Mahindra should go after the right tone and the Scorpio isn't it.

2. "Americans prefer everything Indian and Indians". If you think Americans will buy a Mahindra because its Indian, man, you are on the wrong track. Americans will buy vehicles that are good or that are prestigious. A vehicle doesn't need to be prestigious but needs to have refinement, value for money, good resale value, well established reputation for reliability and longevity, good ride, comfort and handling characteristics, and a general respectability in the market. If you think that people will forget all that for the scorpio and buy it because its Indian, you don't understand the first thing about the US market. As for the "Indians will buy it", forget it. A few might out of patriotism, but most will not because they too will expect the best their money can buy. Its not as if Koreans living here were buying koreans cars when no one else would.

3. Only 3 of the companies I mentioned are French. One is korean. one is japanese. one is british. 3 are italian. 1 is swedish.

4. I am not saying Mahindra shouldn't come into this market. I am saying it should come prepared for long term success, which means it should start off with a good vehicle because that vehicle will establish the brand's reputation. The Scorpio is not going to be good for Mahindra. Do you realize that the Honda Accord has the same position in this market that a Maruti Alto does in India? Do you realize that the Grand Vitara is regarded here as a low grade vehicle and sells very few units? The levels of sophistication and quality here are VERY high. The CRV costs about $20,000 here. thats about 10 lacs, about what the Scorpio costs in India. They cannot sell the Scorpio here for anything close to $20,000. Do you think that Mahindra will be able to sell the scorpio here for $10,000?

I have an interesting fact to share. I was having a casual conversation with an old mahindra employee (30 yrs service type) who was there when mahindra's started selling tractors in the US. Once they were having an official dinner to celebrate a good volume year and some people came in from the dealership in US. They timidly told them that the farmers are actual taking the tractors, parking them in the fields and coupling the PTO to a water pump. Apparently the tractor was cheaper than an engine set to drive the pump.

And from that mahindra is now the worlds largest tractor manufacturer.

In the US there are big brother agencies like NHTSA and EPA that have made the most stringent crash and emission norms in the world. It is interesting to see Mahindra's Scorpio to be the first "truly indian" vehicle to start selling in the US.

With an off-topic analogy, I am wondering if Infosys, TCS, etc. would have to evolve like IBMs or Accentures before entering US market I wouldn't have a job today...

Anyways, my point is Mahindra think that they are ready and they can definitely try their hand in the US market. Even if they don't succeed, they might learn a few things which might help them and one wishful thinking is that their US experience would help the indian consumers in terms of product quality, customer service, etc.

With an off-topic analogy, I am wondering if Infosys, TCS, etc. would have to evolve like IBMs or Accentures before entering US market I wouldn't have a job today...

Anyways, my point is Mahindra think that they are ready and they can definitely try their hand in the US market. Even if they don't succeed, they might learn a few things which might help them and one wishful thinking is that their US experience would help the indian consumers in terms of product quality, customer service, etc.

One can hope..

Very rightly said sir.Its a big thing that an Indian company is able to launch its own product in the American market, which is undoubtedly the largest market in the world,so there definitely has to be some planning which must have gone behind the launch.So instead of cribbing we should hope that it turns out to be a success.

With an off-topic analogy, I am wondering if Infosys, TCS, etc. would have to evolve like IBMs or Accentures before entering US market I wouldn't have a job today...

Infosys, TCS have something that gives them competitive advantage against the likes of IBM that lets them take market share.

What competitive advantage does Mahindra have? How many people will buy a new Scorpio for $15,000 if they can buy a 1 year old CR-V or for the same price with remaining factory warranty? Just what is the Scorpio's value proposition?

Mahindra may calculate that they can sell 10,000 units of the scorpio per year and they may be happy with that, but my contention is that they shouldn't because their vehicle will establish their brand in a way that will take 20+ years to overcome.

If they just want to make money and don't have a long term vision, then fine, let them sell the Scorpio, take whatever profits they make and not give a damn about the scorn and ridicule they will earn for themselves and for India.

I think they should give a damn and so should we.

As far as infosys and TCS competing with IBM, well, lets be clear. the reason India is doing so well in IT is because a group of reasonably intelligent, english speaking educated people with computers on their desks can do IBM's job with reasonable competence and at a better price due to India's low cost environment.

But where is India's Intel? Where is India's Boeing? Where is India's Pratt & Whitney? Where is India's Sony?

Just because Indian IT companies can successfully compete with the IBMs of the world doesn't mean that the rules are the same in other games.

To want to compete in the developed world's auto market is a laudable ambition. But we are not talking about products and services that work in obscurity behind the scenes at corporations.

We are talking about products that are the most amount of money that consumers spend on anything excluding their house. And if you want them to buy your product, you don't submit proposals with pricing and service quality levels. You compete in the showrooms and in the court of public opinion.

Companies outscource their call centers to India because they talk about price and SLAs. THe people who actually deal with call centers hate being routed to Indian call centers. But they don't have a choice because they don't decide who answers the phone. Similarly, my employers customers have no say whether it contracts Wipro and infosys. But cars are different. They decide what car they buy and what they get for their money.

They may buy enough Scorpios for Mahindra to make a profit, but I just dread the scorn that will spread about India and Indians because of the Scorpio.

Infosys, TCS are competing with IBM and the like because they shift the work to India's low cost environment. But the work is originally from US or some other countries. tomorrow if US decides to ban outsourcing altogether, where does Infosys and TCS stand? What products do they have to sustain on their own? Very few as per my knowledge.

So, does mahindra have a vehicle which can compete globally ?
I mean, given the wide array of choices available in US market, who would be buying a scorpio ? Does the scorpio have something in it which will make it a runaway success? Sadly, the answer as I see is NO.

For a price of a new Scorpio, you will get a 2 yrs old CR-V or RAV4. Agreed they are soft roaders and not hardcore 4x4. But then for hardcore 4x4 enthusiasts, there is Jeep, Range Rover etc etc, in a more expensive price range. Scorpio does not have same refinement level as say a CR-V nor does it have same 4x4 capability as a Jeep (my guess). So if Mahindra is OK with a small goal like sell some scorpios and make a decent money, it will do good in US. But if it wants to establish Mahindra as a global brand. they will need something much more capable than a scorpio.

Infosys, TCS have something that gives them competitive advantage against the likes of IBM that lets them take market share.

What competitive advantage does Mahindra have? How many people will buy a new Scorpio for $15,000 if they can buy a 1 year old CR-V or for the same price with remaining factory warranty? Just what is the Scorpio's value proposition?

Mahindra may calculate that they can sell 10,000 units of the scorpio per year and they may be happy with that, but my contention is that they shouldn't because their vehicle will establish their brand in a way that will take 20+ years to overcome.

If they just want to make money and don't have a long term vision, then fine, let them sell the Scorpio, take whatever profits they make and not give a damn about the scorn and ridicule they will earn for themselves and for India.

I think they should give a damn and so should we.

As far as infosys and TCS competing with IBM, well, lets be clear. the reason India is doing so well in IT is because a group of reasonably intelligent, english speaking educated people with computers on their desks can do IBM's job with reasonable competence and at a better price due to India's low cost environment.

But where is India's Intel? Where is India's Boeing? Where is India's Pratt & Whitney? Where is India's Sony?

Just because Indian IT companies can successfully compete with the IBMs of the world doesn't mean that the rules are the same in other games.

To want to compete in the developed world's auto market is a laudable ambition. But we are not talking about products and services that work in obscurity behind the scenes at corporations.

We are talking about products that are the most amount of money that consumers spend on anything excluding their house. And if you want them to buy your product, you don't submit proposals with pricing and service quality levels. You compete in the showrooms and in the court of public opinion.

Companies outscource their call centers to India because they talk about price and SLAs. THe people who actually deal with call centers hate being routed to Indian call centers. But they don't have a choice because they don't decide who answers the phone. Similarly, my employers customers have no say whether it contracts Wipro and infosys. But cars are different. They decide what car they buy and what they get for their money.

They may buy enough Scorpios for Mahindra to make a profit, but I just dread the scorn that will spread about India and Indians because of the Scorpio.

This is getting very off topic, but still I feel that I should make my point clear Errr

Infosys and TCS did NOT have the competitive advantage back in the day when they started. (I know how infosys started with a handful of folks and what kind of work they did to survive). They were smart and then found a niche in outsourcing.

Where is intel, sony, boeing, etc.? what? where is your quest for excellence? where is your determination? where is your patriotism? where are your nobel prizes?

I also have lots of questions to ask....

I also do not see how mahindra is going to survive with scorpio alone. But I like the idea that Mahindra want to compete in US market. May be they hired Mckinsey for a viability report, who knows..

Finally I am not sure about mahindra, but self conscious I am not and I don't give a damn about the scorn that a honest effort like "launching a (successful) product" may cause in someone else's mind. Whatever people might think about scorpio and mahindra, it might not be as bad as satyam. Worse things have happened and might continue to happen

If only people stop investing in stock market becasue of Madoff.... Heh!

Come on guys, lets not get way OT. Infosys, TCS, Wipro know what they are doing. They knew services was good and that why they entered it. They did something that nobody else in the world could do. That is some innovative thinking.
We will change when we are forced to.
Lets not think that inexpensive is incompetent. Thats what good engineering is all about. Products need a good local market which is non-existent in India for most sectors.

Now, for Mahindra Scorpio, they meet the new emission norms. If they are inexpensive (not cheap, the Nissan ad here in North America prohibits me from using the word cheap) people will buy them. They are not luxurious kind, but could be used for utility to start with. just like the tractors are being used.

At the bottom line, in the automobile market, reputation is everything in this market, that reputation can take decades to improve once a bad reputation is established

My contention is that the Scorpio is not good enough.

You can argue that the Scorpio is good enough that any negative reputation it builds for Mahindra specifically and Indian vehicles in general will be outweighed by the benefits of joining the US market.

4x4 addict, you forgot another important consideration for the US market- Interior space.

Americans are generally big built people, and more so teh kind who use pick-up trucks. A scorpio is cramped for even a large Indian (which is average build by US standards) so I dont really see too many people taking fancy to the scorpio or its pick up version in the US

Will Mahindra remove the rear seats and provide more interior space for 5 people ? Just thinking aloud.

Which of Mahindras diesels will meet the strict american diesel emission norms? Mercedes bent over backward with their bluetec thing. How good is their new CRDe wrt emissions?

@GTO
I dont think the CRDe engine is any good for the US market. So most likely their vehicle will have the "m Hawk" powerplant. Tier 2 Bin5 norms are the most stringent in the world but nevertheless there are technologies available that can make a "good" engine perform exceptionally for emissions.
A critical aspect about T2B5 is that emission is confirmed after 30,000 miles and not when the vehicle is absolutely new (run - in) like that for EU/India. It would be interesting to see how they can sustain this.

I don't get it! in this double cab guise, its neither utilitarian nor good looking. Its an underpowered vehicle as far as trucks are concerned so what USP are they going to adopt here. It can definitely be a diesel alternate to the small pickups if mahindra loses the dual cab and gives it a bigger load area.